Court of Appeal Rules City of Berkeley Did Not Need EIR for Downtown Construction Project

Parker Shattuck Neighbors v. Berkeley City Council (2013) ___ Cal. App. 4th. ___ (Dec. 4, 2013).

In the last published CEQA case of 2013, the First District Court of Appeal upheld the City of Berkeley’s decision not to prepare an EIR for a mixed-use and residential project where petitioners failed to show that the project would have a significant effect on the environment.

The Parker Place Project is a three-parcel mixed-use and residential development that will replace a Honda dealership at the intersection of Parker and Shattuck streets in downtown Berkeley. Three environmental site-assessment reports revealed that the lots had contained underground gasoline storage tanks, as well as volatile organic compounds (VOC) in the soil and water samples. However, VOC levels did not exceed contaminant thresholds established by the San Francisco Regional Water Quality Control Board, and the studies concluded that contamination would not likely require cleanup and at least some chemicals were naturally occurring. All storage tanks underlying the property were removed.

Two years after removal of the last tank, developer CityCentric applied to begin constructing the project. The city council approved it, and petitioner Parker Shattuck Neighbors challenged the approval. The trial court ordered the city to vacate its approval for failure to hold a public hearing after modifying the project. The city conducted a second round of administrative proceedings and ultimately proposed a mitigated negative declaration (MND) after finding that mitigation could reduce any potential environmental impacts to less-than-significant levels. Parker Shattuck sought to set aside approval of the MND and to compel the city to prepare an EIR. The group was primarily concerned that the site’s soil contamination was a significant environmental impact, which the MND failed to adequately mitigate.

A lead agency must prepare an EIR whenever substantial evidence supports a fair argument that a proposed project may have a significant effect on the environment. It is the petitioner’s burden to demonstrate a “fair argument” for environmental harm. The Court of Appeal held that Parker Shattuck failed to identify substantial evidence supporting a fair argument that potential health risks to workers and future residents might constitute a significant environmental impact. It did not consider whether the MND contained adequate mitigation measures because insignificant effects do not require mitigation.

The court declined to address whether CEQA required assessment of the effects of the environment on a project (in addition to the effects of a project on the environment) because it found that here, petitioner was arguing that the project would physically change the environment by disturbing contaminated soil. However, the court rejected the notion that the existence of toxic soil contamination at a project site is itself necessarily a significant impact requiring CEQA review and mitigation. The court also found that the site’s appearance on a list of hazardous locations merely meant it was not categorically exempt from CEQA review; it did not mean the project required an EIR.

The court did not decide whether adverse effects confined only those who build or reside in a project can ever render the effects of a physical change significant, given that CEQA generally does not regulate environmental changes that do not affect the public at large. Here, Parker Shattuck did not identify evidence sufficient to support a fair argument of significance even if there were health risks to the project’s workers and future residents. A scientific expert’s suggestion to investigate further, the court added, was not substantial evidence of an adverse impact.